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mitman
Starting Member
7 Posts |
 Posted - 12 January 2012 : 10:03:06
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Hi,
I am wanting to go for bankruptcy, I've had debts since the age of 18 between 20-25k and due to almost living off credit I've never really got these debts down, as my salary increased so did my debts etc.
I am now unemployed and have a mortgaged property.
I also have approx 26k in unsecured loans and credit cards
I bought the house 3years ago on a 75/25 scheme (I got a mortgage for 75% of the house price and have to pay the builder back their 25% in 10years)
The house is now approx 25k in negative equity (I purchased just before the house price crash and never put down any deposit)
I don't want the house any more as I simply cannot afford it while being on JSA, I could only just afford to pay for that and my debts while working anyway.
I just want to know the right order to do things, do I?
Go bankrupt, put my estate and second charge details on the bankruptcy forms then hand the keys to the OR and let them deal with it?
Or is there a better way to do it?
What I don't understand is that the bankruptcy only deals with unsecured debts and so the second charge wont change to an unsecured debt until my house is sold? I am really confused on this :(
Any help would be Greatly appreciated,
Thanks
Steve |
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Viki.W
forum expert
United Kingdom
2211 Posts |
Posted - 12 January 2012 : 10:56:07
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Hi Steve,
You need to get yourself into alternative rented accomodation and then hand the keys back to the mortgage company and then declare bankruptcy.
However, you really need to take advice on this. I suggest a visit to the CAB or speak to an expert on here.
Viki Warbrooke
Vincent Bond & Co
If you would like free advice on all options available and help with your bankruptcy petition please contact me at http://www.vincentbond.com/about_us_Viki_Warbrooke.asp
Please read my experience of debt via my blog at http://vikiw.blogs.iva.co.uk/ |
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Steve Thatcher
New Member
United Kingdom
70 Posts |
Posted - 12 January 2012 : 11:04:28
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Hi Mitman,
your bankruptcy will deal with both the secured and the unsecured liabilities.
When you go bankrupt your property becomes vested in the Official receiver. If you do not want the property and it is negagtive equity as much as you say he will probably instruct the bank to sell and tell him the shortfall. Any second or thrid charge holder would also have a shortfall. All these shortfalls are written off in your bankruptcy.
I hope this clears up any confusion
Steve
Steve Thatcher
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mitman
Starting Member
7 Posts |
Posted - 12 January 2012 : 11:16:44
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Viki, thanks for your reply. I have been in touch with the national debtline, cccs and payplan, they agree that bankruptcy is the best route if I do not wish to keep the house and as long as I understand the consequences.
I will never take out credit ever again, that is no worry, I have just been diagnosed with depression and I am receiving medication for that which is knocking me for 6, also my mum has recently been in hospital with chronic heart failure so I cannot see me getting into any kind of work at this moment in time to pay my debts.
The only thing these charities could not advise me on is what order to approach the house situation.
Some people advise to do as you say and hand the keys to the mortgage company, others say to leave it all with the OR :/
Hi Steve, thanks for your reply. That clears things with regards to the secured / unsecured things, thanks.
Again I am now just left with the dilemma of what to do with the keys, I would much prefer to just hand it all over to the OR as this takes away the obvious problems I would have to deal with, with the mortgage company if I decided to do voluntary repossession before the bankruptcy.
Still unsure what to do on these as there are so many conflicting opinions :( |
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debtinfo
forum expert
2826 Posts |
Posted - 12 January 2012 : 11:19:46
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| Hi Steve, just wanted to pick up on one slight point for accuracy though it doesn't change the point you are making. The OR doesn't really instruct the lendet to sell the property, they just tell the lender that their rights are unchanged and they may do as they see fit within those rights, in other words the OR stays out of it if no equity, inevitably if the bankrupt doesn't pay the mortgage then it gets repossessed |
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debtinfo
forum expert
2826 Posts |
Posted - 12 January 2012 : 11:25:08
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| Hi mitman, given what I just said. if you move out you should give the keys back to the mortgage lender, or at least inform them you have left the property as they will change the locks anyway. the most important thing is not to sign anything that they send you which asks you to be liable for the shortfall |
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mitman
Starting Member
7 Posts |
Posted - 12 January 2012 : 14:39:49
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Hi "debtinfo" thanks for the reply. Am I still right to assume I can give the keys to the OR and let him contact the lender regardless of how it actually works at their end?
At this moment in time my lender doesn't know I am considering bankruptcy and I would like to keep it that until it actually happens if possible.
The way I see it, it also looks better for me to go through the bankruptcy while still being in the house, that way it will be more obvious to the OR that I simply cannot pay anything to my debts as they will be so great when including the house and all the bills that go with it, on top of my unsecured debts. I can get out of the house in a matter of a day once becoming bankrupt. |
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Steve Thatcher
New Member
United Kingdom
70 Posts |
Posted - 12 January 2012 : 14:56:25
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Hello Mitman, perhaps the best way to do this is to stay in the house, not pay the mortgage, as you can't afford to and save the money you would be paying on your mortgage and creditors to pay for for your bankruptcy. That is how I always advise it. How else is anyine supposed to pay for going bankrupt and why pay off towards debts you are going to write off anyway.
Steve
Steve Thatcher
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Viki.W
forum expert
United Kingdom
2211 Posts |
Posted - 12 January 2012 : 15:25:09
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Just to add to what Steve has said. You could also save your bond/deposit for your new accomodation from not paying the mortgage, and I really suggest you get into rented before the bankruptcy as once bankruptcy is on your credit file, it can be quite difficult to use rental agencies.
Viki Warbrooke
Vincent Bond & Co
If you would like free advice on all options available and help with your bankruptcy petition please contact me at http://www.vincentbond.com/about_us_Viki_Warbrooke.asp
Please read my experience of debt via my blog at http://vikiw.blogs.iva.co.uk/ |
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mitman
Starting Member
7 Posts |
Posted - 24 January 2012 : 14:49:28
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Thanks for the replies and sorry for the late reply.
I am living at my parents temporarily so no need to save any rent etc.
I am going to just see what happens on the day of bankruptcy with regards to my house, either the OR takes interest in it or it goes back to the mortgage company, result should be the same. I'll make sure I list the secured loan and possible shortfall.
I do have a couple more silly questions:
When filling in the bankruptcy forms, do I list JSA as an income?
Do I list all my current unsecured debt payments on my expenditure? (these won't be expenses once bankrupt obviously, that's why I ask)
Thanks |
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Bankruptcy - Negative Equity - Second Charge
